More Wrecking From Abbott

by Mark Dreyfus

Of all the objectionable lies that Opposition Leader Tony Abbott has told, the latest load of nonsense about repealing the Clean Energy Future is the most damaging to Australia.

Business enterprise flourishes in an environment of certainty and predictability.The Gillard government has worked hard to provide business with the certainty to invest and innovate in a carbon constrained global economy.

The Clean Energy Future Package supports long-term investment because it uses the power of the market to achieve emissions cuts along a predictable trajectory. A trajectory that extends out to 2050, a necessary timeframe for business to invest in assets that may have a lifetime of 30 years or more.

It is clear that the Australian business community is not too happy with Mr Abbott's destabilising approach.

Yesterday The Sydney Morning Herald reported a spokesman for Pacific Hydro as saying that the Coalition ''seemed intent on creating a sovereign risk for investors''.

In The Age, Nathan Fabian, chief executive of the Investor Group on Climate Change, representing super funds and investment managers with more than $600 billion under management, is reported as saying: ''There are consequences in terms of price impacts in electricity markets. Prices will rise because of uncertainty.''

In Tuesday's Financial Review, the chairmen of Virgin Australia, AGL Energy and Centennial Coal said statements by the Coalition clouded the future investment environment for business.

Jerry Maycock, chairman of AGL Energy, said ''Whilst we have that different approach being taken by the two main parties it is going to make it harder for investors in this sector to commit capital to projects that are dependent one way or the other on a price on carbon.''

KAP Australia's divisional director for commodities, Gary Cox, said ''. . . we need some certainty about how this thing is going to operate. So destabilising the entire operation would seem to be not helpful in the slightest.''

Baker & McKenzie's global head of climate change, Martijn Wilder, said he had been told by clients that the opposition's statements on overseas and forward permits had had an immediate effect on the local carbon market, as a number of clients were ceasing activities until the situation was cleared up.

Responding to threats by shadow treasurer Joe Hockey to abolish the Clean Energy Finance Corporation, Clean Energy Council chief executive Matthew Warren said the corporation was ''a necessary and logical institution''. Energy generator Geodynamics managing director Geoff Ward backed the $10 billion Clean Energy Finance Corporation, which he said would provide a catalyst to prove new technologies and open up the market for new investment.

Senior business leaders are not the only critics of Mr Abbott's advice not to buy carbon permits. Secretary of the Department of Climate Change and Energy Efficiency, Blair Comley explained the effect of taking Mr Abbott's advice, saying ''taking away an instrument that helped companies manage risk, such as carbon permits, would increase costs to consumers''.

''The higher the level of uncertainty, the greater the return private sector capital will require. And that will feed into higher prices,'' Mr Comley told Tuesday's Senate estimates hearing.

Yet this week we've seen Mr Abbott and his faithful deputies telling business not to buy permits. Not to go about their business and make their investment and financial decisions in accordance with what will be the law of the land. This can only be described as unconscionable.

Mr Abbott's willingness to trash Australia's economy and destabilise business in his self-interested quest for the Lodge must stop.

Mark Dreyfus is the Federal Parliamentary Secretary for Climate Change and Energy Efficiency, and ALP Member for Issacs.